Market Trends of thailand freight and logistics Industry
Thailand's transport and storage sector experienced 7.10% YoY growth in 2022 driven by international trade and e-commerce
- According to the Trade Policy and Strategy Office (TPSO), Thailand's logistics sector was the fourth largest in the country's service sector and produced about USD 12.2 billion in economic output in the first half of 2021, or 5% of the GDP. The Ministry of Transport invested around THB 1.8 trillion (USD 51 billion) in 20 mega-projects spanning all modes of transportation in Thailand, including roads, rail, air transport, and ports from 2015 to 2025.
- In 2021, Thailand's transport and storage sector added about THB 736.7 billion (USD 21.29 billion) to the country's GDP. Moreover, in 2022, the sector witnessed a robust 7.10% YoY growth, propelled by the rapid expansion of international trade services and the increasing significance of e-commerce in the country, contributing to its substantial progress. Thailand's logistics facilities and business ecosystem are expected to make its supply chains reliable and competitive across industries and markets. It involves cross-border transactions, with half of the country's online shoppers making international purchases.
- Road freight is Thailand's most important mode of domestic goods transport, accounting for more than 80% of net domestic transport. The Thailand government plans to invest USD 29.7 billion in 24 new projects, among them are USD 19 billion for five railway projects, USD 8.5 billion for 12 road projects, USD 1.8 billion for airport improvements, including Don Muang Airport in Bangkok, USD 230 million to fight coastal erosion and rebuild beaches, and USD 41 million for a new state-of-the-art logistics center.
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USD 2.35 billion was approved by Thailand's cabinet for the 2023 state fund to subsidize fuel costs
- The Thai government decided to waive the diesel excise tax from February 2022 to relieve the impact of the global oil price surge, but this led the government to lose THB 158 billion (USD 4.56 billion) in revenue. The tax exemption and the diesel price subsidy under the fund played a key role in keeping the domestic diesel price at around THB 35 (USD 1.01) a liter. The diesel price has gradually fallen since February 2023 to THB 32 (USD 0.92) a liter in response to declining global oil prices. Thailand's cabinet approved another THB 81.2 billion (USD 2.35 billion) of new borrowing in 2023 for a state fund to subsidize fuel costs as the government battles high inflation.
- A sharp rise in refined and crude oil prices and demand in the international market boosted fuel prices in Thailand. Thailand's average monthly crude oil imports grew by 63%, reaching USD 1.704 billion in 2021. The average monthly value of imported refined oil increased by 20% to USD 0.066 billion. The ongoing war between Russia and Ukraine also contributes to the increase in fuel prices, as Russia is the second-largest oil producer in the world. The rapid rise in global demand and prices for crude oil and refined oil is driving up fuel prices in Thailand.
- In Thailand, energy costs increased by more than 50% in 2022. The crude oil price in Thailand decreased during Q4 2022 to 112 USD per bbl, which represents a considerable decline of 9% compared to the previous quarter’s value. On a YoY basis, crude oil prices in Thailand increased by 24%. Thailand’s Oil Fuel Fund has decided to maintain the current retail price of diesel at USD 1.01 per liter in an attempt to help mitigate the high living cost amidst global oil price fluctuations.
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OTHER KEY INDUSTRY TRENDS COVERED IN THE REPORT
- Thailand's population declines due to the lowest fertility rate of 1.33 in Southeast Asia
- Strong budget allocations for the construction sector (2023-2025), along with the growing manufacturing sector driving the economy
- More than 36.6 million Thais purchased consumer goods online as of 2022
- Thailand expects to become a hub of the EV market, as export sales increased by over 50% in 2022
- Rise in fuel prices and driver wages are impacting the trucking industry as they account for more than 60% of domestic transportation costs
- Thailand ranks 34th in 2023 Logistics Performance Index due to rise in export industry and enhanced logistics infrastructure
- Thailand's sea freight transport market is expected to grow, supported by USD 15 billion investment plans under development
- Thailand is enhancing port connectivity through infrastructure plans, such as a USD 66 million investment in the development of inland container ports
- Thailand's government aims to cut logistics costs to 11% by 2027, down from 13.8% in 2021, by investing in a Thai-Chinese high-speed rail project
- Thailand witnesses growth in the Eastern Economic Corridor (EEC) with USD 17.33 billion in investments in six flagship projects
- Thailand aims to invest over USD 63 billion by 2027, to promote high-tech industries and economic growth
- Energy price increase due to sanctions on Russian energy imports reduced supply, causing inflation to surge
- Thailand is one of the largest automotive manufacturers in Southeast Asia, producing over 2 million vehicles annually
- Thailand anticipates increased LNG imports by 2.3 million tons per year by 2030
- Isuzu and Toyota are the top commercial vehicle manufacturers in the country, with a combined market share of 70%
- Thailand's trucking industry has decided to switch its fleet of 400,000 diesel trucks to electric vehicles in 2023
- Increasing oil and gas imports, and capacity expansion initiatives are expected to drive growth in 2023-2030
- Under the Thailand 4.0 policy, the country is leveraging digitalization and automation to improve port operations
- Thailand invested USD 45 billion in infrastructure in 2022, primarily due to increased competitiveness in a variety of sectors
